Does Regulation Kill Jobs?

February 14, 2014

Does Regulation Kill Jobs?

A new book exploring the connection between government regulation and jobs, edited by members of the Penn Law faculty, was the subject of panel discussions at the Wharton School, George Washington University, and the Harvard Kennedy School of Government this past Spring.

Does Regulation Kill Jobs?, published by the University of Pennsylvania Press in January, provides analysis of what has become a heated partisan issue in the wake of the Great Recession.

In a series of essays, the book explores the argument that burdensome regulations undermine private sector competitiveness and job growth, weighing that argument against competing claims that tough new regulations actually create jobs at the same time that they provide other benefits.

The contributors – leading legal scholars, economists, political scientists, and policy analysts – reveal the complex reality of regulation’s effects on employment. Their work indicates that individual regulations can at times induce employment shifts across firms, sectors, and regions – but that regulation overall is neither a prime job killer nor a key job creator.

The challenge for policymakers, the new book suggests, is to look carefully at individual regulatory proposals to discern any job shifting they may cause and then to make regulatory decisions sensitive to anticipated employment effects. Drawing on their analyses, contributors recommend methods for obtaining better estimates of job impacts when evaluating regulatory costs and benefits. They also assess possible ways of reforming regulatory institutions and processes to take better account of employment effects in policy decision-making.

The book is edited by Cary Coglianese, the Edward B. Shils Professor of Law at Penn and Director of the Penn Program on Regulation; Adam M. Finkel, senior fellow and executive director of the Penn Program on Regulation; and Christopher Carrigan, Assistant Professor of Public Policy and Public Administration at George Washington University and a former Fellow with the Penn Program on Regulation.

Panel discussions about the book took place Feb. 18 at the Wharton School, March 13 at the Society for Benefit-Cost Analysis, April 3 at George Washington University, and April 10 at the Harvard Kennedy School.

In the video feature below, Prof. Coglianese discusses Does Regulation Kill Jobs? with the Office of Communications.

Transcript

I’m Cary Coglianese. I direct the Penn Program on Regulation and I’m a member of the faculty here at the University of Pennsylvania Law School.

Our new book, released by the Penn Program on Regulation and the University of Pennsylvania Press, is entitled Does Regulation Kill Jobs?.

In 2007, President Bush signed legislation that imposed ever tightening energy efficiency standards on light bulbs. Now, that has meant that incandescent light bulbs, the traditional light bulbs that we are familiar with, can’t meet some of these standards. And that means, of course, that a factory that makes incandescent light bulbs is likely to close shop. But it also means that other kinds of light bulbs, compact florescent light bulbs for example, that can meet the energy efficiency standards, there is more of a demand for them. And that means that those factories making those light bulbs will expand and hire more workers.

This is just one story, of course, and as I said, the systematic research seems to bear out that there are job losses associated with regulation - but there are also job gains and they tend to balance each other out.

But the shifts of jobs, from one business to another, from one sector to another, or from one part of a country to another still means that real people are out of work or in transition. That their families are suffering some very real effects. It also means that our political leaders are still concerned about the relationship between regulation and employment. It’s for that reason that we produced this book, Does Regulation Kill Jobs?. The book tries to cut through the heated political rhetoric and bring serious empirical, analytical rigor to bear on this vital public policy question.

The book brings together work by leading economists, and legal scholars, political scientists, regulatory analysts, and practitioners, as well. And it takes up the central question, does regulation kill jobs, and brings some new empirical analysis to bear on that question. It also offers very real suggestions for regulatory agencies and legislators who want to know what we can do as a society to improve our analysis of employment effects.

And finally, it also considers some reforms to the regulatory process that would mean that employment effects are given better due when regulators are making decisions. In total, the book tries to bring more light to bear on a very heated policy debate, to help society improve its understanding of the effects of regulation on employment, but also to improve the design of regulation more generally.